@tmade THEN you can just ship out the physical card. Print and mail it. Use tracking
Alternative is to take friend and family payment
Then you also avoid the fees. Much harder for the buyer to scam you then
You should explain this to paypal
Show them the following:
The order showing that a giftcard was ordered using paypal
The order where giftcard is spent on a product
Proof that item is delivered in some way
This should prove to paypal that the buyer is dishonest. They will close the case in your favour. If the buyer cause more trouble, report it to police as fraud and tell him he is reported and to stop his scam!